Twitter Ad Revenue Could Explode To $400M This Year

Although previous reports suggested otherwise, new data from GroupM says that Twitter is poised to bring in between $300 and $400 million in advertising dollars this year – largely thanks to the introduction of its self-serve advertising platform.

According to reports from AdWeek, Twitter’s self-serve advertising platform could be a big hitter. However, the boost that small and medium businesses bring to Twitter’s bottom line could also increase the price of ads for larger businesses.

The self-serve platform is aimed at small and medium sized businesses looking to start advertising on Twitter without shelling out the cost of Twitter’s traditional ad offerings. Advertisers are able to purchase ads through Twitter’s ad website, and pay only for those interactions they choose. A promoted tweet is said to cost between $0.75 and $2.50 for every engagement (such as a retweet, @mention, favorite or click), while a new follower costs between $2.50 and $4.

The GroupM report suggests that integrating self-serve ads will affect the overall price of ads on Twitter by up to 137 percent.

Previous to the self-serve ad platform, advertisers could only purchase ads directly from Twitter, at a price tag as high as $100,000 for a 24-hour Trending Topic.

However, Twitter has been rolling out its new self-serve platform, aimed at small and medium sized businesses, to groups of 10,000 advertisers since February. And these new entries onto the 140-character ad scene are poised to raise the overall ad price for everyone, as demand grows and supply remains steady.

The report also notes that the new system runs the risk of individuals new to the game bidding too much for certain ad products, raising the price for others in the market.

Still, all of this bodes well for Twitter itself. The $400 million projected ad earnings are higher than previously expected. eMarketer had estimated Twitter earning $226 million in advertising revenue in 2012, back before its self-serve platform materialized.

(Money image via Shutterstock)

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